Like a bird on the wire, like a drunk in a midnight choir, I have tried in my way to be free. (Photograph by Giovanni Spezzacatena.)

The best place to store your extra food is in your neighbor’s belly.
(African proverb)

Last week I talked about blending entrepreneurial and not-for-profit approaches to filling some of the real gaps in the regional economy, particularly the food economy. The entrepreneurial — or for-profit — approach is a good one when there is a real gap to be filled, where there are needed goods or services not being supplied by existing businesses; and the not-for-profit — or community service — approach excels where there is a gap which might not necessarily be filled by a market-driven approach, either because it is not profitable enough to attract investors or because it is a public good best provided by an association of individuals willing to sacrifice profit to the benefit of the wider community.

The essence of being a not-for-profit corporation is that whatever profits are generated through the activities of the corporation cannot be distributed to the members. In other words, no one can invest money in a not-for-profit with the hope of seeing a profitable return on that money. Instead, a not-for-profit corporation is a legal device for allowing a number of people to come together to achieve goals or transact business that would be difficult for any of them to do on their own, and to do that without the profit motive getting mixed up in what is usually a service to the community.

A not-for-profit corporation can indeed produce a surplus through its operations, in which case it can reinvest that surplus in those operations by purchasing equipment, starting new projects, training its staff, or in any number of other ways that will allow the organization to thrive. And those operations may produce direct economic benefit to the community by paying wages and salaries and by purchasing goods and services from other businesses. What the not-for-profit cannot do is offer dividends or other financial bonuses to its members. The membership of a not-for-profit and all other individuals or corporate partners who contribute money to it recognize that achieving the purposes of the corporation is more important than making a profit on the money they contribute.

They recognize that its status as a provider of a public good is higher than its status as a tool for increasing capital. In other words, they see it as a part of the commons.

Most cooperatives (e.g., MEC, First Credit Union) are for-profit, which means that any surplus they generate through their activities can be returned to members in the form of dividends or patronage returns. Dividends are determined on the basis of the number of shares owned; patronage returns on the basis of the amount of business transacted with the cooperative. (The credit union pays dividends; MEC pays patronage returns.) A for-profit cooperative may also issue investment shares, which allow investors (who are not necessarily members) to put their money into the cooperative in hopes of a return on that capital.

There is also a class of not-for-profit cooperatives, known in BC as ‘community service cooperatives‘. As the for-profit cooperative is to the for-profit corporation, the community service cooperative is to the not-for-profit corporation (society or association). As the name ‘community service cooperative’ suggests, these are often used as a way of providing a service to the community in general, as opposed to cooperatives like MEC and the First Credit Union, which primarily serve the interests of their members. (Although cooperatives, even for-profit ones, often have a very high degree of commitment to community service.)

The legislation defining the community service cooperative came into effect as recently as 2007, and so this model remains to be developed and tested in a variety of different areas and for different purposes. But it offers an appealing combination of the power of cooperative association combined with the ability to provide valuable services to the community as a whole.

Since late November 2009 I have been part of a small team of people learning how cooperatives work and how to get one started. This work picks up on the sorts of thinking that I set out in a couple of posts from back in October 2009: “Why we need a food-security cooperative” and “What can a local food-security cooperative do?“. What we’re looking at are ways to organize people to work together on projects that they might find hard to accomplish on their own — and on projects where there are real economies of scale to be had by pooling labour, time, or money. Examples of this sort of thing can be found in the two posts linked to just above; but a good example would be a commonly-owned fruit crusher and cider press which could be used by members and the general public to convert fruit to cider or wine for the few weeks of the year when the fruit is most abundant. Why should everyone need to own expensive equipment like this? Why not belong to a group which serves common needs without introducing the profit motive?

There is a great deal more to say about the structure and the motivation of a cooperative (coming up in future columns). But for our little initiating group, it is clear that food — of all things — is so fundamental to the life of the individual and of the community that we need to empower people to work for themselves and with one another in order to make more food available locally year-round, as equitably and affordably as possible, and with the least negaitve impacts on the environment. It will help to have an active and activist regional organization which is open to all, dedicated to the creation of a stronger local food economy, driven by the interests and needs of its members, fully accountable to the membership and to the wider community, and obliged by its very nature to place community service above individual profit-making. That’s where we’re heading — and very soon we’ll be asking you to come along with us.

If you want to know more, please feel free to email me. Or you can come out to the upcoming Chamber of Commoners event on Wednesday February 10 and to the fifth annual Seedy Saturday in Powell River on March 13, 2010 at the Powell River Recreation Complex. We’ll be at both of these events to answer questions and hear your wonderful ideas.